International Market Diversification for a Premium Exit

MNO is specialized creative design, branding, and communications firm with the founding principal several years from retirement. The principal would like to substantially increase his retirement account while continuing to work for five years or so. Sale of the business was not an option as the principal declined to work for anyone else. MNO has two principal types of prestigious clients: broadcast journalism and major consumer brands. OT was retained to explore options; then, if possible, develop a strategic plan to meet the principal’s specialized needs.

OT’s deep dive approach included detailed reviews of MNO internally, including the firm’s internal finances, operations and personnel. The principal’s family and friends were also interviewed. The market, competitors, suppliers, and current and former clients were also interviewed. One key finding, that the broadcast journalism market was shrinking in the US and Europe, led to the ultimate recommendations.

OT recommend a series of choices that all involved selling less than 50% of the principal’s stock to large foreign clients in the Middle East and Far East, which are growing broadcast markets. This would enable the principal to boost his retirement account without giving up day-to-day control of the business. In addition to acquiring stock the principal would agree to an exclusive relationship for design work, a valuable commodity for the investor. Clients in the Far East were very interested and negotiations are proceeding quickly.